If you’ve been following the media industry over the past year, you probably don’t need anyone to tell you the waves of disruption continue to increase in both height and frequency. The news that widespread cutbacks have caused dissatisfied readers to flee shouldn’t come as much of a surprise. But while those waves have swamped some traditional players, other parts of the industry have been able to ride the tide, and non-traditional sources continue to play a growing role in how people get their news—although whether that is good or bad is still open for debate.
All of that and more is contained in the latest State of the Media report from the Pew Research Center’s Project for Excellence in Journalism, which was released on Monday morning. (Note: We will discuss many of these issues and more at our paidContent conference in New York on April 17). There’s a lot to take in, but here are what I believe to be some of the key take-aways.
The bad news:
• Cutbacks continue and consumers are leaving: Close to one-third of U.S. adults say they have stopped using a news outlet because of dissatisfaction over the content—in other words, because they weren’t getting the news they wanted or expected to get. Survey respondents mentioned both fewer stories in general and less-complete reporting. While it’s impossible to know whether this phenomenon is related to repeated rounds of cutbacks and job losses, it seems likely.
• No one cares about the industry’s financial problems: An interesting aspect of Pew’s research is that only a small number of respondents were even aware of the financial woes of the media industry. Even worse, those who were most aware of the situation were also the most likely to have stopped using a traditional news outlet. Are some readers choosing to desert what they see as a sinking journalistic ship? It certainly looks that way.
• The disruption of advertising is accelerating: Although digital advertising rose by 17 percent last year, that was not nearly enough to make up for the ongoing decline of print advertising, Pew says. In 2012, approximately $16 in print revenue was lost for every $1 in digital revenue—an even worse ratio than the already dismal 10-to-1 relationship that existed in 2011. And much of the growth in digital is benefiting Google (GOOG) and Facebook (FB).
• It’s not just newspapers any more: Pew’s research shows that local television is also being decimated by the disruption in both viewership and advertising revenue to the point at which viewers have started to notice the difference. Whether it’s because of cutbacks or a desire to appeal to more viewers, Pew says local TV news is also focusing more on sports and entertainment, spending less time on crime and political coverage.
The Good News:
• Demand for news is growing, not shrinking: Although it may be coming at the expense of some traditional players, there is clearly a large and growing appetite for news; the top news sites saw traffic increase by 7 percent in 2012, according to Pew. And the impact of social media seems positive in the sense that those who have heard about news via friends and family in such channels show a stronger interest in finding out more.
• Some outlets are experiencing success with subscriptions: In the wake of the success of the New York Times paywall, many newspapers have erected subscription walls, and this is generating some reader-provided revenue that has helped to staunch the bleeding for some publishers (although even for the Times and the Financial Times, this has not filled the gap entirely).
• Sources are going direct: This is probably one of the most contentious aspects of the disruption in media. Social tools such as blogs, Facebook, Twitter, and other platforms produce a “democratization of distribution” that allows everyone from celebrities to politicians—even brands and companies themselves—to reach an audience directly. Is this good or bad for journalism? The debate on that question continues to rage.
• New forms of advertising are emerging: This is another contentious topic in media: the rise of what some choose to call “native advertising,” or sponsored content, and in some cases “brand journalism.” To detractors such as political blogger Andrew Sullivan, it is ethically dubious, and to many traditional journalists such as former NYT executive editor Bill Keller it is a “slippery slope,” but new media entities such as BuzzFeed and even the Atlantic are using it to some success.
As with any overview of the media business, there will be those who see this glass as half-empty and those who see it as half-full—and perhaps a growing number who have completely lost interest in the glass because they’re already getting water elsewhere. As Emily Bell of Columbia and her fellow authors Clay Shirky and Chris Anderson pointed out in their recent report on “Post-Industrial Journalism,” and as author Clay Christensen noted in a recent interview at Harvard, upheaval is the order of the day in the media business and will likely be so for some time.
Shirky said in an essay in 2011 that we as a society need the media business to be chaotic, as unpleasant as that may be, because we have no idea what the future of the industry looks like. Even now new entities are being born and new models being applied—such as the Forbes “BrandVoice” model, or Sullivan’s direct-to-readers model—that could either save the industry or prove to be dangerous distractions. If you like bumpy rides with an uncertain ending, the media industry is definitely the place for you.
Also from GigaOM:
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